Supreme Court Accepts Certiorari In Quality Stores

By Phil Karter

The U.S. Supreme Court today accepted the government’s petition for certiorari in  United States v. Quality Stores (Civil No. 10-1563, 6th Cir. 2012), a case in which the Sixth Circuit affirmed a lower court’s decision that supplemental unemployment compensation benefit (SUB) payments are not taxable as wages and are consequently exempt from FICA taxes.  In accepting the case for consideration, the Supreme Court is expected to resolve a conflict between the Sixth Circuit and the Federal Circuit, which decided a prior case,  CSX Corp. v. United States, 518 F.3d 1328 (Fed. Cir. 2008), in favor of the government.

The case is of considerable interest to thousands of taxpayers, at least 2,400 of whom have filed administrative refund claims according to government estimates.  More than a billion dollars in potential tax refunds is riding on the ultimate outcome of this issue.   Quality Stores will be decided by eight justices, as Justice Elena Kagan is taking no part in the case.

For past coverage on this issue, please click here.

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